Quantcast
Environmental News for a Healthier Planet and Life

Bankrupt Fracking Companies Are Harming the Climate and Taxpayers

Energy
Bankrupt Fracking Companies Are Harming the Climate and Taxpayers
Nearly 250 U.S. oil and gas companies are expected to file for bankruptcy by the end of next year. Joshua Doubek / Wikimedia Commons / CC by 3.0

Fracking companies are going bankrupt at a rapid pace, often with taxpayer-funded bonuses for executives, leaving harm for communities, taxpayers, and workers, the New York Time reports.


Nearly 250 U.S. oil and gas companies are expected to file for bankruptcy by the end of next year — more than went under in the last five years combined — as demand craters due to the pandemic, a global price war, and falling renewable energy prices. These failing companies often neglect well maintenance and plugged well repairs to save money, causing tons of ultra-heat-trapping methane to continue gushing into the atmosphere.

Shale wells typically cost $300,000 to close — far more than the estimates used by companies, regulators and financial analysts — and an analysis prepared for the Times found companies have failed to reserve sufficient funds, as required by law, to remediate their well sites, leaving taxpayers to foot the cleanup bill.

As a result, early estimates show substantial increases in methane concentrations over Texas and New Mexico oil fields in March and April 2020 compared to the previous year. The Trump administration is seeking to effectively eliminate methane leak detection and repair requirements.

One drilling site, abandoned by Extraction Oil & Gas in Greeley, Colorado, is situated just 700 feet from an elementary school serving the community's fast-growing immigrant population where air pollution monitors recorded 100 periods of elevated levels of toxic benzene over the course of seven months last year.

Those wells were originally planned to lie closer to a more affluent, majority white charter school, but were moved after an outcry from that school's parents. Extraction Oil & Gas paid 18 of its officers and key employees a combined $6.7 million in "retention agreements" last month, three days before it filed for bankruptcy protection.

Extraction is hardly alone, Chesapeake Energy declared bankruptcy in May after paying $25 million in executive bonuses just weeks before. Diamond Offshore Drilling got a $9.7 million COVID-stimulus tax refund in March and then paid its executives the same amount as cash incentives to remain with the company as it undergoes bankruptcy proceedings.

"It seems outrageous that these executives pay themselves before filing for bankruptcy," Kathy Hipple, an analyst at the Institute for Energy Economics and Financial Analysis and a finance professor at Bard College told the Times. "These are the same managers who ran these companies into bankruptcy to begin with."

The recent spate of oil & gas bankruptcies hurts the firms' workers as well, with lawsuits against the companies arising from workers injured and killed on the job put on hold.

For a deeper dive:

New York Times

For more climate change and clean energy news, you can follow Climate Nexus on Twitter and Facebook, and sign up for daily Hot News.

Erik McGregor / LightRocket / Getty Images

In many schools, the study of climate change is limited to the science. But at the University of Minnesota, Twin Cities, students in one class also learn how to take climate action.

Read More Show Less

EcoWatch Daily Newsletter

Pexels

By Daniel Raichel

Industry would have us believe that pesticides help sustain food production — a necessary chemical trade-off for keeping harmful bugs at bay and ensuring we have enough to eat. But the data often tell a different story—particularly in the case of neonicotinoid pesticides, also known as neonics.

Read More Show Less

Trending

A Fridays for Future activist on Oct. 9, 2020 in Turin, Italy. Stefano Guidi / Getty Images

By Andrea Germanos

Fed up with "empty promises" from world leaders, a dozen youth activists on Wednesday demanded newly sworn-in President Joe Biden and Vice President Kamala Harris take swift and bold climate action — even more far-reaching than promised on the campaign trail — stating that their "present and future depend on the actions your government takes within the next four years."

Read More Show Less
Several innovative companies have begun brainstorming better ways to repurpose old wind turbine blades. xu wu / Getty Images

When wind turbine blades reach the end of their usefulness, most are sawed into transportable pieces and hauled to landfills, where they never break down. Because of the resources and energy that go into producing these blades, this type of disposal is inefficient and wasteful. Recently, several innovative companies have begun brainstorming better ways to repurpose this green technology after it goes offline.

Read More Show Less
A replica of a titanosaur. AIZAR RALDES / AFP via Getty Images

New fossils uncovered in Argentina may belong to one of the largest animals to have walked on Earth.

Read More Show Less